*In this Exercise, all the prices are excluding Vat unless specified*

Question 1: A person purchases an article for Rs.6200 and sells it to a customer for Rs.8500. if the sales-tax (under VAT) is 8%; find the VAT paid by the person.

Answer:

Cost Price of the article

Selling Price of the article

VAT Tax Charges Tax Paid

VAT Tax on Selling Prices Tax on Cost Prices

Question 2: A purchases an article for Rs.3600 and sells it to B for Rs.4800. B in turn, sells the article to C for Rs.5500. If the Sales-Tax (under VAT) is 10%, find the VAT levied on A and B.

Answer:

Cost Price of the article for A

Selling Price of the article A

VAT levied on A

Cost Price of the article for B

Selling Price of the article B

VAT levied on B

Question 3: A manufacturer buys raw material for Rs.60,000 and pays 4% tax. He sells the ready stock for Rs.92,000 and charged 12.5% tax. Find the VAT paid by the manufacturer.

Answer:

Cost price of the raw material

Tax paid by the manufacturer

Selling price of the stock

Tax charged

VAT Tax recovered on sale Tax paid on purchase

Question 4: The cost of an article is Rs.6000 to a distributor. He sells it to a trader for Rs.7500 and the trader sells it to a customer for Rs.8000. If the VAT rate is 12.5%; Find the VAT paid by the:

i. Distributor

ii. Trader

Answer:

Cost Price of the article for distributor

Selling Price of the article for distributor

VAT levied on distributor

Cost Price of the article for Trader

Selling Price of the article for Trader

VAT levied on Trader

Question 5: The printed price of an article is Rs.2500. A wholesaler sells it to a retailer at 20% discount and charges sales-tax at the rate of 10%. Now the retailer, in turn, sells the article to a customer at its list price and charges the sales-tax at the same rate. Find:

i. The amount that retailer pays to the wholesaler.

ii. The VAT paid by the retailer.

Answer:

Printed Price of the article for wholesaler

Cost Price of the article for retailer

Amount paid by the retailer

Selling Price of the article for retailer

VAT levied on distributor

Question 6: A retailer buys an article for Rs.800 and pays the sale-tax at the rate of 8%. The retailer sells the same article to a customer for Rs.1000 and charges sales-tax at the same rate. Find:

i. The price paid by a customer to buy this article.

ii. The amount of VAT paid by the retailer.

Answer:

Cost price of the article

Tax paid by the retailer

Selling price of the article

Tax charged

Price paid by the customer

VAT Tax recovered on sale Tax paid on purchase

Question 7: A shopkeeper buys 15 identical articles for Rs.840 and pays sales-tax at the rate of 8%. He sells 6 of these articles at Rs.65 each and charges sales-tax at the same rate. Calculate the VAT paid by the shopkeeper against the sale of these six articles.

Answer:

Cost price of the article

Tax paid by the retailer

Selling price of the article

Tax charged

VAT Tax recovered on sale Tax paid on purchase

Question 8: The marked price of an article is Rs.900 and the rate of sales-tax on it is 6%. If on selling the article at its marked price, a retailer has to pay VAT=Rs.4.80; Find the money paid by him (including sales-tax) for purchasing this article.

Answer:

Let Cost price of the article

Tax paid by the retailer

Selling price of the article

Tax charged

VAT Tax recovered on sale Tax paid on purchase

Money paid

Question 9: A manufacturer marks an article at Rs.5000. He sells this article to a wholesaler at a discount of 25% on the marked price and the wholesaler sells it to a retailer at a discount of 15% on its marked price. If the retailer sells the article without any discount and at each stage the sales-tax is 8%, calculate the amount of VAT paid by:

i. The Wholesaler

ii. The Retailer [2010]

Answer:

Market Price of the article for wholesaler

Cost Price of the article for wholesaler

Amount of tax paid by the wholesaler

Cost Price of the article for retailer

Amount of tax paid by the retailer

Selling price of the article for retailer

Amount of tax paid by the end customer

Vat paid by retailer

Vat paid by wholesaler

Question 10: A shopkeeper buys an article at a discount of 30% and pays sales-tax at the rate of 8%. The shopkeeper, in turn, sells the article to a customer at the printed price and charges sales tax at the same rate. If the printed price of the article is Rs.2500; Find:

i. The price paid by the shopkeeper.

ii. The price paid by the customer.

iii. The VAT paid by the shopkeeper.

Answer:

Printed Price of the article for shopkeeper

Cost Price of the article for shopkeeper

Tax paid by the shopkeeper

Price paid by the shopkeeper

Selling Price of the article for shopkeeper

Tax paid by the customer

Price paid by the customer

VAT paid by the shopkeeper

Question 11: A shopkeeper sells an article at its list price Rs.3000 and charges sales-tax at the rate of 12%. If the VAT paid by the shopkeeper is Rs.72, at what price did the shopkeeper buy the article inclusive of sales-tax?

Answer:

Let Cost Price of the article for shopkeeper

Tax paid by the shopkeeper

Selling Price of the article for shopkeeper

Tax paid by the customer

VAT Tax recovered on sale Tax paid on purchase

Tax paid by the shopkeeper

Price paid by the shopkeeper

Question 12: A manufacturer marks an article for Rs.10,000. He sells it to a wholesaler at 40% discount. The wholesaler sells this article to a retailer at 20% discount on the marked price of the article. If retailer sells the article to a customer at 10% discount and the rate of sales-tax is 12% at each stage, find the amount of VAT paid by the:

i. Wholesaler

ii. Retailer

Answer:

Market Price of the article for wholesaler

Cost Price of the article for wholesaler

Amount of tax paid by the wholesaler

Cost Price of the article for retailer

Amount of tax paid by the retailer

Selling price of the article for retailer

Amount of tax paid by the end customer

Vat paid by retailer

Vat paid by wholesaler